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03.03.16

Scotland announces reforms to council tax and social security

Scotland’s new financial powers have become clearer as the government announced reforms to council tax and social security.

Yesterday Nicola Sturgeon, the Scottish first minister, announced that from April next year the Scottish government will lift the council tax freeze and increase council tax for properties in bands E to H.

She said the council tax increases, which vary from just over £100 each year for band E to £517 for band H, would raise £100m a year to be spent on schools, and councils would have the power to increase council tax by 3% a year, raising an extra £70m.

Sturgeon said: “The reforms I am setting out today are fair, reasonable and measured – they bear in mind that the commitments politicians make on tax have to be paid for by hardworking people across the country.”

She said the government will also increase the child allowance within the council tax reduction scheme by 25%, benefiting 77,000 low income households by an average of £173 per year.

Kevin Keenan, financial spokesperson for the Convention of Scottish Local Authorities, said: “What today boils down to is that they have done nothing of substance, they have taken a system made it more complicated and less transparent for individuals and more complex for councils to administer.  They have muddied the waters.”

New control over benefits

Meanwhile Alex Neil MSP, cabinet secretary for social justice, communities and pensioners’ rights, announced that under the Scotland Bill, the Scottish government will gain control of eleven types of benefit, although this only represents 15% of welfare spending. It will also be able to create new benefits and change the way universal credit is paid.

He said the Scottish government would introduce a new Scottish social security agency to deliver changes to benefits including increasing carer’s allowance by £600 a year to the same level as jobseeker’s allowance, scrapping rules cutting benefits to the families of disabled children if they are in hospital for more than 84 days, limiting the bedroom tax, and introducing new flexibilities on paying universal credit, including paying social landlords directly.

He said: “Unlike the Tories in Westminster, our social security system will have dignity and respect for people at its heart.”

The news comes after months of financial negotiations between the English and Scottish governments produced a promise that funding to Scotland will stay at the same level for the next six years.

 (Image c. Danny Lawson from PA Wire)

 

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